Lendlease Global Reit posts portfolio occupancy of 99.8% for Q1; raises stake in Jem

SINGAPORE-listed Lendlease Global Commercial Reit (Lendlease Global Reit) posted a portfolio occupancy of 99.8 per cent for its first quarter ending Sep 30, 2021.

In a business update on Friday (Nov 5), the manager of the Reit (real estate investment trust) said for Q1 FY2022 the weighted average lease expiry (WALE) is "long" at 8.5 years by net lettable area (NLA), and 4.4 years by gross rental income (GRI).

Lendlease Global Reit intends to make distributions to unitholders semi-annually and will distribute at least 90 per cent of its adjusted net cash flow from operations for each financial year. The actual level of distribution will be determined at the manager's discretion.

During the quarter, Lendlease Global Reit had also completed the acquisition of an additional stake in Jem, a suburban mall in Jurong East, to reach a 31.8 per cent stake in the mall.

"The acquisition has increased its exposure in the resilient suburban retail segment and is expected to bring stable income to Lendlease Global Reit unitholders," the manager noted.

In the coming months, Jem will welcome coffee brands Huggs Collective and Flash Coffee, and new-to-market food and beverage concept store, Coco.cado. As part of Lendlease's proactive asset management strategy to improve asset returns, enhancement works were carried out to create additional leasable space to unlock value at Jem, pointed out the manager.

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Occupancy rate for 313@somerset was at 98.9 per cent with a tenant retention rate of 90 per cent as at Sep 30, 2021. The performance was driven by the manager's proactive leasing strategy which focuses on tenant retention and refreshed new offerings to rejuvenate the mall, the manager highlighted.

New tenants brought onboard the mall include Marks & Spencer, Miniso, Playmade and Super Coconut.

Tenant sales for the Reit continued to improve 14.1 per cent year on year to S$118.1 million in the first 9 months of 2021, despite Covid-19 restrictions, the manager said.

Gross borrowings were S$677.6 million as at Sep 30, 2021 with a gearing ratio of 34.3 per cent. The Lendlease group and Lendlease Global Reit have undrawn debt facilities of S$137.2 million-equivalent multicurrency to fund its working capital.

The weighted average debt maturity was 2.3 years with a weighted average running cost of debt of 0.9 per cent per annum.

Lendlease Global Reit also has a interest coverage ratio of 8.8 times, which will provide ample buffer from the debt covenant of 2 times, the manager noted.

All of Lendlease Global Reit's debt are unsecured, ensuring that it has balance sheet flexibility, the manager added.

"We are confident that Lendlease Global Reit's portfolio is well-positioned to navigate through the Covid-19 challenges anchored through its high occupancy, long WALE and minimal expiries in FY2022," said Kelvin Chow, chief executive officer of the manager.

Units of the counter closed 0.6 per cent or S$0.005 higher at S$0.885 on Wednesday (Nov 3).

Read more: 

• Lendlease Global Commercial Reit acquires stake in Jem
• Lendlease announces board changes effective Oct 26
• Lendlease to build large-scale Singapore vaccine facility in late-2021